The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Ahmedabad quashed service tax demand as nature of service provided are of Goods Transport Agency service.
The appellant, Vatsal Resources Pvt Ltd is engaged in providing of various services. Acting on the intelligence that M/s Forward Resources Pvt. Ltd. and other firms operated by and related to the directors of the said company were indulging in evasion of Service tax, search was conducted and during the search number of documents related to income tax TDS statements, copies of Balance Sheet /audit reports, bank statement were seized and statement of Jagdishchandra Somani, Director of M/s Forward Resources Pvt. Ltd. was recorded. Statement of Manoj V. Rajak, Director of Appellant was also recorded. The Investigation revealed that appellant was engaged in providing different services to different clients as detailed in TDS statement and had received the service charges. During the investigation, the Appellant deposited Rs. 50,00,000/- towards their Service tax liability.
Investigation also revealed that Appellant have provided taxable service under Business Auxiliary Service, Advertising Agency Service, Market Research Agency Service, Management or Business Consultancy Service and for that they have charged and collected service tax, but failed to deposit the service tax to the government exchequer. Accordingly, show cause notice dated 29-09-2017 was issued proposing the Service tax demand along with interest and penalty. The Additional Commissioner confirmed the demand of service tax along with interest and penalty. Aggrieved, the appellant filed an appeal before the Commissioner (Appeals) who by impugned order -in-appeal dated 09-11- 2018 upheld the order passed by the Additional Commissioner and dismissed the appeal. Aggrieved by the impugned order-in-appeal present Appeal has been filed.
The Bench consisting of Ramesh Nair, Judicial Member and Raju, Technical Member held that “The said documents clearly established that the nature of the service provided by the Appellant to M/s Consumer Marketing (India) Pvt. Ltd. are in the nature of Goods Transport Agency service. We noticed that in terms of Notification No. 30/2012 -ST dtd. 20.06.2012 on GTA service, service tax is to be paid by the recipient of services and appellant does not become a person liable for payment of service tax in this case. Therefore, demand of service tax is not sustainable on services provided by Appellant to M/s Consumer Marketing (India) Pvt. Ltd.”
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscanpremium. Follow us on Telegram for quick updates
